CORPORATE WINDOW: Developing gas storage

AS indigenous reserves of gas continue to deplete, the reliance on imported LNG will grow. Due to the commodity supercycle triggered by the ongoing strategic conflict, Pakistan has been unable to import the expected quantities, with the situation exacerbated due to the dearth of the availability of the foreign exchange. However, it is evident that as soon as the LNG prices return to their long-term historic average values in the international markets and some sort of economic stability is achieved within the country, the imports are expected to rebound. This is simply because of latent energy demand and, to an extent, the availability of the required infrastructure. It is also likely that the government may allow the auction of unutilised capacity in existing terminals to industrial consumers. Further, with the government recently announcing the implementation of the Weighted Average Cost of Gas (WACOG), the incentive is expected to shift towards imported fuel. With this context in mind, the issue often debated is the absence or limitation of LNG storage in Pakistan. The country currently has two Floating Storage and Regasification Units (FSRU) based offshore LNG import terminals, with a limited combined storage capacity of about 0.3 million cubic meters.